RWE Consulting Case: Floating Wind in Japan

Note for Interviewer

Share Exhibit 1 with the interviewee.

• Inform the interviewee that Exhibit 1 includes additional information on the Japanese floating market that can help identify relevant opportunities and risks.
• If requested, inform the interviewee that the focus of this case is the evaluation of floating wind in Japan, and other countries should not be considered.
• If requested, instruct the interviewee to make reasonable hypotheses in case exact information is not provided in Exhibit 1.

Note for Interviewer

• Allow the interviewee time to think about his/her framework (1-2 minutes)
• If the interviewee does only present a list of ideas without structuring them, ask them what a framework for the ideas might look like.
• Probe the interviewee's responses to ascertain their understanding of the problem, for example, by asking "What do you mean by XXX?"

Note for Interviewer

Share Exhibit 2 with the interviewee.

• If requested, inform the interviewee that
  • 5% of the regions suitable for floating wind will be utilised with floating wind parks until 2050 (i.e., the utilization factor).
  • 2 turbines per km^2 can be installed, given the special characteristics of floating wind turbines.
  • he/she can calculate with an average capacity of a floating wind turbine of 8 MW.

Note for Interviewer

• Refrain from providing further comments about how to utilize the map to answer the question Q2. Allow the interviewee to discover on their own how the map can assist them in answering the question.
• The interviewee should begin by identifying the area on Japan's coastline in square kilometres suitable for floating wind, marked in petrol colour. The area should be approximated as one and a half squared fields.
• Ask the interviewee to define the calculation approach before proceeding with the numerical calculations to ensure that the interviewee has a clear understanding of the problem.
• Only intervene if the interviewee struggles to find a solution, offering support with follow-up questions such as "What can we learn from that map?" or "What additional information is relevant to answer our question about the market potential?".
• Please refrain from simplifications and rounding at early stages – the interviewee is expected to calculate with the exact numbers

Note for Interviewer

• Ask the interviewee to first describe the calculation approach before delving into specific numerical calculations.
• If requested, inform the interviewee that 
  • a capacity of 8 MW per wind turbine can be assumed.
  • a utilization factor of 30% can be assumed.
  • investment costs of 2 mn EUR per MW of installed capacity can be assumed.
  • running costs of 820 k EUR per year can be assumed.
  • the service life of a wind turbine is on average 20 years (including all risks) before being put out of service.
  • a governmental investment incentive exists, the power price from floating wind turbines is guaranteed from the Japanese government with a fixed price at 100€ per MWh.

Note for Interviewer

• Probe the interviewee's understanding of relevant cost items in terms of both running costs (OPEX) and upfront investment costs (CAPEX). Especially regarding the running cost block, the interviewee is expected to articulate that both variable and fixed costs are important for profitability assessment.
• Please refrain from simplifications and rounding at early stages – the interviewee is expected to calculate with the exact numbers.
• The interviewee should not include capital costs and interest rates, linear depreciation of investments over the lifecycle of a turbine are assumed.

Note for Interviewer

Only if the interviewee does not present a synthesis independently and without prompting, ask the interviewee to synthesise the solutions and prepare a “Go or No-Go” recommendation.

Note for Interviewer

• Probe the interviewee's responses to ascertain their understanding of the problem, for example, by asking “What do you mean by XXX?”
• Ensure that the interviewee considers quantitative and qualitative arguments in the recommendation.